2012 (5) TMI 227 - HC - Companies Law

Application for impleading - application was dismissed without issuing any notice Held that - CLB was not justified in disposing of the application without notifying the proposed respondent. Having regard to the fact that application is maintainable and averments make out a ease for issue of notice to the proposed respondent before consideration on merits, from the perusal of the order passed by the CLB which is impugned in this appeal, it is clear that application is not disposed of on the ground that it is not maintainable and order is passed on merits. Wherefore, for the reasons aforesaid the impugned order is liable to be set aside. Appeal is disposed of accordingly

Issues:
1. Application for impleading the 15th respondent was rejected without issuing notice.
2. Justification of the Company Law Board's decision to dismiss the application.
3. Legality of passing orders without notifying the proposed respondent.
4. Setting aside the impugned order and restoring the Company Application.
5. Direction to dispose of the Company Application after considering objections.
6. Clarification that no opinion on the case merits was expressed.
7. Timeline for filing counter and disposal of the application.
8. Disposal of related miscellaneous civil applications.

Analysis:
1. The appeal was filed due to the rejection of the application for impleading the 15th respondent without issuing notice. The appellant argued that the proposed respondent had not been given an opportunity to present their case before the Company Law Board (CLB).

2. The main contention was whether the CLB was justified in dismissing the application based on the submissions of other respondents and documents produced by them. The respondents argued that there was sufficient material on record to support the CLB's decision.

3. The High Court noted that while it is not mandatory for the CLB to issue notice in every impleading application, in this case, the CLB should have notified the proposed respondent before passing the order. The court found that the application was maintainable and made out a prima facie case for issuing notice to the proposed respondent.

4. Consequently, the High Court set aside the impugned order and restored the Company Application to the file of the Addl. Principal Bench at Chennai for further consideration. The court directed the CLB to dispose of the Company Application after considering the objections from the proposed respondent and all parties involved.

5. It was clarified that the High Court did not express any opinion on the merits of the case. The CLB was instructed to proceed based on the application for impleading and objections to be filed by the proposed respondent, ensuring orders were passed in accordance with the law promptly.

6. The court set a timeline for the proposed respondent to file a counter to the Company Application within one week. All parties agreed to cooperate, and the application was to be considered and disposed of within two weeks to expedite the process.

7. Finally, with the appeal disposed of, related miscellaneous civil applications for stay, investigation, and direction were also disposed of accordingly, as they were no longer necessary for consideration.

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